WheelerWeek – Miller Park Tax

After rejecting the Brewer Stadium bill twice on 16-15 votes and then reconsidering, the Senate early Friday passed the measure 16-15. Sen. George Petak of Racine switched from opposing the bill to supporting it. The measure now goes back to the Assembly, where a half-dozen non-controversial amendments are expected to be approved on Tuesday.

A Brief History of the Brewer Stadium Tax

The 1995 Wisconsin Act 56 created the Local Professional Baseball Park District which states the district’s jurisdiction is “any county with a population of more than 600,000 and all counties that are contiguous to that county and that are not already included in a different district.” The Southeast Wisconsin Professional Baseball Park District was created. The District includes Milwaukee, Ozaukee, Racine, Washington, and Waukesha Counties and is run by a 13-member board all by appointments. The enacting legislation created a sales tax of no more that 0.1% of the sales price or purchase price on citizens in the five counties. The sales tax is referred to as the Miller Park Sales Tax.

The State of Wisconsin began levying the tax on January 1, 1996, and averages $25 million a year in revenue. When Miller Park was opened in 2001, the initial debt was $524 million in principal and interest payments. The original projections of the sales tax estimated the tax could be sunset as early as 2014, but due to economic conditions, the District only saw an average annual growth of 1.1% between 2002-2014, $132.3 million less than projected. As a result, the District delayed the sunset estimate date to 2018. The new projections now estimate the possible sunset between 2018 and 2020.

The original plan for Stadium was $250 million for construction, $90 million from the Brewers, plus $72 million for infrastructure. The Brewers were only able to come up with $40 million in naming rights, paid for by Miller Brewing. Milwaukee Economic Development Corporation put in $15 million. The Legislature approved $250 million to be used to pay to build the entire stadium, but the district decided to lease items like the scoreboard, roof-driven mechanism, concession equipment and furniture adding $45 million to the project according to an audit by the Legislative Audit Bureau. The stadium authority also spent $1.1 million of the stadium tax on a $3.3 million youth ballpark on the stadium grounds. Additional stories said the stadium district spent $1.2 million on outside public relations, and installed a new $11 million scoreboard in 2011, which it is estimated almost half was paid for with taxpayer money.

Over the years legislators have suggested sunsetting the tax; one of the most vocal being Sen. Tim Carpenter. Rep. Vos and Sen. Darling proposed setting a 2014 sunset for the tax in 2008. Sen. Lehman proposed a ticket surcharge in 2010 to help pay off stadium debt. In 2011, Reps. Cory Mason and Bob Turner sponsored a bill to remove Racine form the taxing district. None of the proposals were passed.

And Today …

WISCONSIN POLICY FORUM LAYS OUT OPTIONS FOR MILWAUKEE

The Wisconsin Policy Forum issued a report on May 9 (Full Report), providing different options for paying for the new Milwaukee County Justice Center. Milwaukee County wants a new justice center and the proposal is estimated at $300 million. The report says there are several ways the Justice Center could be financed and paid for; one of those options being “reallocation of the current 0.1% Miller Park sales tax.” The report summary states, “In addition to considering a new sales tax, policymakers could consider extending Milwaukee County’s portion of the five-county, 0.1% Miller Park sales tax to help pay off the courthouse debt once Miller Park debt is retired in late 2019 or early 2020. That approach would raise about $15 million annually, or more than half of the estimated debt service costs associated with a 15-year, $300 million G.O. bond issue.” According to the chart on page 31 of the report, Strategy 3B would be to extend the sales tax to service the debt. The pros listed include: No sales tax increase as the tax is already in place, a small tax should not impact consumer behavior, and new funding source would reduce or avoid impacts to existing needs. The cons listed include: Would require State authorization, the sales tax may not fully cover annual debt service costs, and the Miller Parks sales tax is unpopular with many county residents.